With recent supply disruptions to thermal coal supplies in Australia, China and South Africa estimated to have taken up to 60 million tonnes out of the market this year, spot prices are still running at near record levels.

Spot prices at the Port of Newcastle, the benchmark for Southeast Asia, settled somewhat in the week ending March 7, with globalCOAL’s Newcastle index at $129.58 a tonne, a drop of $2.47 from the previous week.

As at March 10, 39 vessels were queued for loading at the port, with the average waiting time for the week ending March 10 being 13.29 days.

Spot prices for coking coal have also reached unprecedented levels, with Goldman Sachs saying one Asian mill has been reported as paying just over $US400 a tonne in recent weeks.

A Merrill Lynch research note from March 7 said over 800,000 tonnes of spot coking coal has been sold at between $US300 and $330 a tonne in the last three weeks, adding that the loss of up to 15 million tonnes of coking coal due to flooding in the Bowen Basin has prompted the fevered rush for supplies, with the current situation representing a “supply apocalypse”.

“There is now an obvious scramble for supply with industry sources confirming that Asian steel mills are begging for tonnes at close to any cost,” said Merrill Lynch research analyst Vicky Binns.

“We expect peak coking coal prices in JFY08 with a forecast premium Hard Coking Coal price of $US300 per tonne, and a much higher trending price profile for the next three years,” Ms Binns said.